Like the U.S. economy overall, the construction market in the state of Washington is trying to survive a slump in the local economy. With the construction industry’s measured expansion throughout the United States, the projected growth nationally is expected to rise steadily in coming years. The U.S. Census Bureau of the Department of Commerce says construction spending in the U.S. in November 2013 totaled $934.4 billion, about one percent above the previous month’s total, and five percent above November of 2012.
The construction industry in the state of Washington is struggling to keep up. New home construction is a leading revenue and job generator in Washington, which could help stimulate the state’s economic recovery. (Construction work as defined here refers to new construction, additions, alterations, maintenance or repairs.)
Past Market Overlook
According to the Associated General Contractors of Washington (AGCWA), construction sales totaled more than $27.1 billion in 2009, which was down from 2007 by 26 percent. Washington state’s housing construction industry was hit hard initially by the slump in the economy and it’s still trying to bounce back to pre-2009 levels. Many factors led to the drop-off in housing construction, which has in turn affected several sectors of the economy, including job creation, new and existing homes, employer growth, and tax revenues. The housing construction industry heavily impacts the employment sector, leaving today’s shaky market skittish but on the recovery. With high raw materials costs, an overall economic downturn and other factors affecting the industry as it is now, the state is slowly growing.
Current Market Outlook
Slowly but surely, the construction industry in the state of Washington is on the rise, despite the lackluster pace of economic expansion. According to AGCWA, the market outlook for 2014 is at +2.7 percent. The state of the housing market directly affects several other factors, such as state and local governments. When the construction industry is booming, public treasuries feel the benefits; likewise, when it’s reeling, the government feels the hit.
Jobs are also affected by the health of the construction industry. If no one can afford to construct homes, no one will be hired to build them. Everyone from contractors and plumbers to electricians and roofers take a hit, with employment levels falling and rising in accordance with the state of the construction market at any given time.
As Washington emerges from a three-decades-long slump in new home construction permit applications, as well as a big drop in construction employment and falling home prices, the construction market in this state looks promising but is still sluggish. With tentative recovery imminent, the Associated General Contractors of America predicts more improvement in the private sector than the public sector. The fact of the matter is, the state is coming out of a six-year downturn in construction, which claimed more than two million jobs and transformed a $1.2 trillion per year market into one pulling in about $800 billion a year. Construction hiring is moving in the right direction but it will still take some time and work to return to previous norms.
Gordon Woods is a freelance writer based in Tulsa, Oklahoma. Gordon writes on construction, remodeling, plastic tanks, environmental science, alternative fuel possibilities, reservoirs, green living and other topics.